Nebraska senators begin review of school aid, property taxes

LINCOLN, Neb. (AP) - Nebraska lawmakers kicked off a review Thursday of school funding and its impact on local property taxes, an issue that has divided the Legislature in years past.

The Revenue and Education committees convened along with mediators who will try to help senators agree on recommendations to one of the most persistent problems that lawmakers face.

Nebraska’s public schools rely heavily on property taxes, but rising agricultural land values have forced farmers and ranchers to pay an increasing share of the cost even when their incomes decline. At the same time, urban senators with fast-growing districts want to protect state aid for their schools.

The joint committee’s first meetings are intended to generate ideas for possible legislation when the Legislature convenes in January. On Friday, committee members will get a briefing from Andrew Reschovsky, a tax policy and education finance expert from the University of Wisconsin.

“I think this can be approached in a variety of different ways,” said Sen. Kate Sullivan of Cedar Rapids, chairwoman of the Education Committee. “My hope is that we end up with several potential solutions that we can take to the public hearing to get reaction.”

Possible ideas include a boost in state aid, expanding the sales tax base or finding new taxes that would allow school districts to lower their levies. None of the suggestions are firm, but the joint committee is intended to help senators sort through them, said Sen. Mike Gloor, chairman of the Revenue Committee.

“We’ve tried to set up a process that gives us the best chance of that,” said Gloor, of Grand Island. “We’re still moving in the right direction.”

Nebraska’s school aid formula distributes money by calculating a school’s needs and subtracting what it can generate through local property taxes and a few other sources. The difference between a district’s needs and its local resources determines how much state “equalization” aid it receives.

Nebraska’s schools received $3.8 billion in funding from various sources in the 2013-14 school year to cover operating and construction costs. Local property taxes accounted for nearly $1.7 billion of their operations funding and $228 million in construction funding. The rest came from the state and federal government, fees and other sources.

The joint committee has scheduled a Nov. 12 public hearing to get feedback on its recommendations.